Week-end Wrap – Political Economy – February 19, 2023

by Tony Wikrent

 

War

“The Sy Hersh effect: killing the messenger, ignoring the message”

[Responsible Statecraft, via Naked Capitalism Water Cooler 2-16-2023]

“Absolute crickets. That is the sound in the major mainstream media — both foreign and domestic — following the charges by veteran investigative journalist Seymour Hersh that the United States led a covert operation to blow up the Nord Stream pipelines in September 2022…. Second, they point to what appears to be “single sourcing” in Hersh’s Substack report (though he is much more ambiguous about this in his interview with Radio War Nerd this week). Additionally, Twitter and Substack sleuths, using OSINT (open source intelligence,) say they’ve found holes in the details (like the class of minesweeper ship involved and where it was located the day Hersh claims the explosives were planted) that cast doubt on his entire story. But the questions raised about Hersh and his reporting (appropriate or not) do not explain the lack of mainstream coverage of his extremely detailed, 5300-word article, which under any other circumstances should have opened the floodgates of journalistic inquiry. … Media critic, author, and podcaster Robert Wright suggests the media blackout is part of an ongoing trend of one-sided and incurious Ukraine War coverage. He pointed to explosive, yet little-reported claims by former Israeli prime minister Neftali Bennett earlier this month that the West had killed a tentative peace deal between Russia and Ukraine last March. ‘In some ways I think MSM’s more or less ignoring Naftali Bennett’s comments on aborted early-March Ukraine negotiations is even less excusable than ignoring the Hersh story,’ Wright said in an email exchange with RS. ‘MSM can always say Hersh is now just a freelancer and was relying basically on a single anonymous source, etc — but Bennett is an eyewitness to what he’s describing, and he’s the former prime minister of Israel!’”

 

NATO Turning to Target China? Western Alliance Developing Plan For Multiple Simultaneous Conflicts 

[Military Watch Headlines, via Mike Norman Economics 2-15-2023]

On February 14 a high ranking NATO source, cited by Bloomberg, warned that NATO members were preparing plans for the alliance to involve itself in multiple conflicts simultaneously – including conflicts beyond its traditional areas of responsibility. During meetings in Brussels on February 14-15 NATO Defence Ministers will sign a classified guidebook containing plans of action for “high intensity” conflicts and conflicts “beyond the area of responsibility” of the alliance, which will include requirements for NATO members’ military investments. Members will additionally be directed to redirect investments to the sectors seen as most important for collective security – whether it be tank forces or missile defences – to strengthen the military bloc’s collective warfighting capabilities. The report comes as NATO members have not only increasingly involved themselves in the ongoing Russian-Ukrainian War, whether by dispatching hundreds of Marines to the battlefield as in Britain’s case, or providing even larger personnel contributions through private military contractor groups as was done by Poland among others. As Western intervention in the conflict has continued to increase, NATO members have also expanded their military footprints in the East Asia aimed at China – most recently in the form of aerial warfare drills involving the U.S., Britain and Australia.…

 

Ukraine is burning through ammunition faster than the US and NATO can produce it. Inside the Pentagon’s plan to close the gap 

[CNN, via Naked Capitalism 2-17-2023]

 

Radio War Nerd EP #366 — Seymour Hersh on US Bombing Nord Stream Pipelines (postcast; unlocked)

[Radio War Nerd, via Naked Capitalism 2-13-2023]

 

“Mike Gallagher: A New Cold Warrior”

[RealClearPolitics, via Naked Capitalism Water Cooler 2-14-2023]

“The West is unprepared for everything all at once…. Well, at least that is what Rep. Mike Gallagher along with a team of academics and generals had to imagine when they poured over what looked like the most complicated “Risk” board ever assembled. It was only a war game, an exercise hosted last May by the Center for a New American Security…. If the U.S. and China go to war, the Wisconsin Republican said in a ‘Meet the Press’ interview, ‘a lot of people are going to lose their lives.’ The lesson: ‘We want deterrence to actually work.’ That is also the mission statement, in so many words, of the House Select Committee on China which Gallagher now chairs, a mammoth undertaking to examine not just the military risk but also the ideological and economic threats presented by the Chinese Communist Party. It is serious business. And Gallagher, a 38-year-old former U.S. Marine, is a serious man. Everyone says so. There is a feeling in Congress that the effort might just rise above the normal self-importance of Capitol Hill. ‘The word ‘serious’ has been tossed around about this committee because that’s the desire,’ said Rep. Mikie Sherrill. Confronting an existential threat, the New Jersey Democrat told RealClearPolitics, shouldn’t be something members ‘do for personal edification or partisan means.’ And that’s what had Gallagher ‘worried’ when he pulled her aside. The two have served on committees together, and they teamed up in the CNAS war game. A U.S. Navy pilot before entering politics, Sherrill said during that exercise she appreciated the Marine’s ‘knowledge of ground operations.’ His question on the House floor, between votes earlier this year, didn’t have to do with tactics or grand strategy. Who would the Democrats seat on his committee?”

 

The Calamity of America’s ‘Divine Mission’ 

[Consortium News, via Naked Capitalism 2-14-2023]

[TW: Quoting John Quincy Adams to rebut Robert Kagan’s war mongering. We need to see much more like this! ]

 

Democrats’ political suicide

Biden DOJ Backing Norfolk Southern’s Bid To Block Lawsuits 

Rebecca Burns & Julia Rock, February 16, 2023 [The Lever]

In the case against Norfolk Southern, the Biden administration is siding with the railroad in its conflict with a cancer-stricken former rail worker. A high court ruling for Norfolk Southern could create a national precedent limiting where workers and consumers can bring cases against corporations.

The lawsuit in question, filed initially in a Pennsylvania county court in 2017, deals with a state law that permits plaintiffs to file suit against any corporation registered to do business there, even if the actions that gave rise to the case occurred elsewhere.

In its fight against the lawsuit, Norfolk Southern is asking the Supreme Court to uphold the lower court ruling, overturn Pennsylvania’s law, and restrict where corporations can be sued, upending centuries of precedent….

If the court rules in favor of Norfolk Southern, it could overturn plaintiff-friendly laws on the books in states including Pennsylvania, New York, and Georgia that give workers and consumers more leeway to choose where they take corporations to court — an advantage national corporations already enjoy, as they often require customers and employees to agree to file litigation in specific locales whose laws make it harder to hold companies accountable.

 

The Last Pandemic Welfare Supports Get Kicked Out 

David Dayen, February 13, 2023 [The American Prospect]

Expirations around Medicaid and food stamps reinforce how Democrats failed to live up to professed ambitions on the welfare state….

One pandemic-era program was already targeted for termination even before the end of the national emergency. In the end-of-year omnibus passed in December, Congress scheduled a phaseout of the Medicaid continuous enrollment provision. This program gave extra matching funds to states to maintain their Medicaid rolls, which as a result swelled by nearly 20 million since the start of the pandemic—much more than the total number of Americans on the Obamacare insurance exchanges. But starting in April, states will be able to cut their rolls, and the federal funding will decline before evaporating at the end of the year.

States still have to follow certain rules to comply with the phaseout, but there’s no question that many poor Medicaid recipients are going to lose their coverage—between 5 and 14 million, according to the Kaiser Family Foundation. That’s compounded by the fact that 16 million food stamp beneficiaries in 35 states (who are likely to overlap with Medicaid recipients) will also see their benefits slashed by an average of roughly $90 a month per person, starting in March. This was also decided in the December omnibus, and will result in something like a $36 billion cut to anti-poverty measures over the next 12 months.

 

Buttigieg Pretends He’s Powerless To Reduce Derailment Risks

David Sirota, Rebecca Burns, Matthew Cunningham-Cook, Julia Rock & Andrew Perez, February 15, 2023 [The Lever]

Facing pressure to act, America’s chief rail regulator now insists he is “constrained.” He’s not.

 

“Ron Klain Looks Back on Biden’s First Two Years as President”

[The New Yorker, via Naked Capitalism Water Cooler 2-14-2023]

How do you understand the fact that there is not more of a reflection of that either in poll numbers or in the commentary around the President?

Well, I think those are different questions. I understand the poll numbers. I think we’re at a time where the public is just very hard on leaders. Joe Biden’s approval rating is forty-three, or whatever it is. It’s the highest approval rating of any leader in the G7, other than the new Prime Minister of Italy. A lot higher than Macron, a lot higher than Scholz.

So I just think that this is a giant conversation, that we’re just at a place where, in democracies, we’re going to find that forty-three or forty-four will turn out to be a very high approval rating, just because people are polarized: the people on the other side are never going to say you’re doing a good job, and for the people in the middle it’s just easier to say, “Eh.” The measure of political success is the midterms. People can poll and poll all they want, but, in the end, people went to the polls. We obviously won a bunch of governorships, we won state legislatures, we got just a little bit of a setback in the House—but a historically small setback in the House. If you want to measure our political success, I think it’s less about the President’s polling number than the electoral result we delivered in the midterms.

In terms of the commentariat, look, I think there’s certain things that they love in a President: soaring rhetoric and pithy bons mots and all these things, the kind of things that make Jed Bartlet a great President on “The West Wing.” But what Joe Biden brings to this job is wisdom, relationships, character, and determination. And those are kind of nineteen-sixties values that don’t get the credit they deserve in the year 2023. I think that’s unfortunate.

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Strategic Political Economy

How Precision Scheduled Railroading at Norfolk Southern Caused a Toxic Vinyl Chloride Mushroom Cloud Over East Palestine, Ohio

Lambert Strether, February 12, 2023 [Naked Capitalism]

 

[Twitter, via Naked Capitalism Water Cooler 2-14-2023]

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The Ohio Derailment Catastrophe Is a Case Study in Disaster Capitalism

[thenation, via Naked Capitalism 2-17-2023]

 

This is plutocracy, not capitalism

Why Smart People Believe Stupid Things 

[Gurwinder, via Naked Capitalism 2-17-2023]

[TW: Such as Adam Smith, David Ricardo, and their doctrine of comparative advantage.]

The correlation between intelligence and ideological bias is robust, having been found in many other studies, such as Taber & Lodge (2006), Stanovich et al. (2012), and Joslyn & Haider-Markel (2014). These studies found stronger biases in clever people on both sides of the aisle, and since such biases are mutually contradictory, they can’t be a result of greater understanding. So what is it about intelligent people that makes them so prone to bias? To understand, we must consider what intelligence actually is….

…Rationality is intelligence in pursuit of objective truth, but intelligence can be used to pursue any number of other goals. And since the means by which the goal is selected is distinct from the means by which the goal is pursued, the intelligence with which the agent pursues its goal is no guarantee that the goal itself is rational.

As a case in point, human intelligence evolved less as a tool for pursuing objective truth than as a tool for pursuing personal well-being, tribal belonging, social status, and sex, and this often required the adoption of what I call “Fashionably Irrational Beliefs” (FIBs), which the brain has come to excel at….

What this means is that, while unintelligent people are more easily misled by other people, intelligent people are more easily misled by themselves. They’re better at convincing themselves of things they want to believe rather than things that are actually true. This is why intelligent people tend to have stronger ideological biases; being better at reasoning makes them better at rationalizing.

 

“How elite psychological biases can explain a civilisation in free fall”

[¡Do Not Panic!, via Naked Capitalism Water Cooler 2-18-2023]

“To those of us with little agency over the direction of the system but with a keen interest in not going up in a ball of flames, the evidence that we need massive change is obvious. But if you are deeply invested in the system as it is, if you helped develop and define it, if its functioning continues to be advantageousness for you personally, the need for change won’t be obvious. Many of our elites are decades into this thing, their fingerprints all over how the system works and why it works the way it does…. So with things starting to go very obviously wrong, rather than look rationally at the evidence and change course, the elites are turning to strange schemes and bizarre ideas, unable and unwilling to believe that the whole edifice they helped build and run is crumbling…. We cannot hope to break the cognitive biases of political and business elites. They are too deep in to business-as-usual and too well-rewarded by it. The elite have sunk everything into this ideological project for the last 40 years, and will continue to escalate their commitment, in denial of their failings, until it all falls apart. Any change will have to come from the outside. From people and forward-thinking movements with no investment in the systems and institutions that govern us. From those with no skin in the game. With conditions worsening, the next pandemic inevitable and the planet getting less habitable by the year, this change needs to come soon.”

 

Big Pharma’s Patent Monopolies and Corruption Are Costing Americans Big Dollars 

Dean Baker [DC Report, via Naked Capitalism 2-13-2023]

 

How the Wealthy Save Billions in Taxes by Skirting a Century-Old Law

[ProPublica, via The Big Picture 2-12-2023]

Congress outlawed tax deductions on “wash sales” in 1921, but Goldman Sachs and others have helped billionaires like Steve Ballmer see huge tax savings by selling stocks for a loss and then replacing them with nearly identical investments.

 

From Jeffrey Epstein to Sam Bankman-Fried to Madoff – JPMorgan Banks the Creepy Crooks

Pam Martens and Russ Martens,February 16, 2023 [Wall Street on Parade]

…Bloomberg News reported on the creepy emails that former JPMorgan Chase executive Jes Staley was sending back and forth from his email account at the bank to child sex trafficker Jeffrey Epstein, as the bank was only too happy to handle 55 accounts worth hundreds of millions of dollars for Epstein.…

Two trial lawyers literally wrote the book… JPMadoff: The Unholy Alliance Between America’s Biggest Bank and America’s Biggest Crook, Helen Davis Chaitman and Lance Gotthoffer argue that RICO, the Racketeer Influenced and Corrupt Organizations Act, is “the perfect tool” to bring JPMorgan to heel. The lawyers explain:

“In enacting RICO, Congress meant business. This powerful law enforcement weapon requires proof that the defendant committed ‘at least two acts of racketeering activity’ within a ten year period, that are related to financial gain. The predicate acts are drawn from a list of 27 federal and eight state law crimes. They include the typical mob crimes like murder, kidnapping, gambling, arson, robbery, extortion, and drug dealing. But the predicate acts also include a lot of the crimes committed by Wall Street banksters in order to enrich themselves at the expense of others, such as bribery, mail and wire fraud, fraud in the sale of securities, embezzlement, financial institution fraud, obstruction of justice, tampering with or retaliating against a witness, victim or informant, and money laundering.”

Yesterday’s Bloomberg News article about Jes Staley’s sick emails to Epstein are derived from a lawsuit brought against JPMorgan Chase by the government of the U.S. Virgin Islands, where Epstein owned a secluded island compound. The lawsuit alleges the following:

“For two decades, Defendant JPMorgan Chase Bank, N.A. (‘JPMorgan’) facilitated and sustained Jeffrey Epstein’s sex-trafficking by handling and [redacted] his payments to young women and girls who were his victims and recruiters. Sex-trafficking was the principal business of Epstein’s accounts held by JPMorgan, and JPMorgan profited handsomely from the hundreds of millions of dollars in assets in those accounts, in addition to Epstein’s connections and referrals of ultrawealthy and powerful clients.”

…Given the five criminal felony counts that the U.S. Department of Justice has brought against JPMorgan Chase in the past nine years and its institutional knowledge of the crimes this bank is willing to tolerate in its search for profits, one has to ask this: why is the government of the U.S. Virgin Islands bringing these charges instead of the government of the United States?

 

Obama’s turncoat antitrust enforcer is angry about the Google breakup 

Cory Doctorow [via Naked Capitalism 2-15-2023]

The DoJ’s antitrust lawsuit against Google triggered an avalanche of pearl-clutching editorials from establishment lawyers and economists who argue that such a move is both counterproductive and legally incoherent. These Very Bad Takes are only to be expected, since they emanate from ideologues who volunteered to serve as Renfields for vampiric monopolists….

American antitrust law always was, and continues to be primarily concerned with power — namely, the power of large companies to usurp democratic accountability and act with impunity, able to use their economic might to buy off or scare off lawmakers and regulators who would otherwise hold them to account.

The fact that we’ve largely forgotten this truth — a truth that can be easily verified simply by reading the Sherman Act and its successors — isn’t an accident of history. Some of the richest people in the history of the human race poured enormous fortunes into burying it. Take the Manne Seminars, lavish junkets for federal judges that bamboozled them with the Bork’s conspiratorial account of antitrust laws’ true intent…

 

Sam Bankman-Fried, BlockFi and Sullivan & Cromwell: A Viper’s Nest of Conflicts and Intrigue

Pam Martens and Russ Martens,February 13, 2023 [Wall Street on Parade]

 

Amazon (AMZN) Takes Half of Each Sale From 2 Million Small Businesses 

[Bloomberg, via Naked Capitalism 2-14-2023]

[TW: It’s actually more than half, for items sold at $10 or less, because Amazon grabs a base fee, then adds on a percentage. For example, If I sell a used book on Amazon for $5.00, Amazon takes a fee of $(4.14), or  -82.80% of the sale price. In addition, Amazon charges the buyer, and passes on to the seller, only $3.99 for postage. This does not cover the postal charge for large books with 400 or 500 pages or more, let alone the mailing envelope and other incidentals to preparing an item for shipping. About half a year ago, I went through all my books listed on Amazon and raised the prices on most of them. But I am amazed that there are still millions of used books for sale on Amazon for $1.99 or less. Amazon will take over $3.00 if the book sells at that price. What’s the point?]

 

“Polarization of the Rich: The New Democratic Allegiance of Affluent Americans and the Politics of Redistribution”

[Perspectives on Politics, Twitter, via Naked Capitalism Water Cooler 2-13-2023]

In 2016, future Senate Majority Leader Chuck Schumer remarked about the 2016 national Democratic electoral strategy that “for every blue-collar Democrat we lose in western Pennsylvania, we will pick up two moderate Republicans in the suburbs in Philadelphia, and you can repeat that in Ohio and Illinois and Wisconsin.”Footnote 1 In 2019, during the Democratic presidential primary election campaign, then-candidate Joe Biden told a group of donors about his governing style, that if elected president, “No one’s standard of living will change, nothing would fundamentally change.”Footnote 2 In November 2021, the second most-costly provision of the “Build Back Better” bill that passed the Democratic-controlled House cut taxes on the richest Americans.Footnote 3 What’s going on with the party that formerly represented working people?

In this paper, I show that affluent and even very affluent voters—measured by income, but also stock ownership and occupation—have left the Republican Party to join the Democrats in a decades-long process, and I argue that we should pay renewed attention since this trend has meaningful implications for the politics of economic (re)distribution.

 

Budget scaremongering

CBO warns of sharp uptick in Social Security, Medicare spending 

[The Hill, via Naked Capitalism 2-17-2023]

 

Thoughts on CBO’s Budget and Economic Outlook — Stephanie Kelton

Stephanie Kelton [The Len, via Mike Norman Economics 2-18-2023]

By assuming a gloomier economy—no growth, higher unemployment, stickier inflation, and more aggressive rate hikes in the near term (among other things)—CBO is telling lawmakers that projected deficits over the period 2023-2032 will be $900 billion higher than previously forecast (back in May 2022). Part of that jump is due to higher (revised up $295B) projected debt service over that period.

 

Beware Debt Hysteria

Robert Kuttner,  February 17, 2023 [The American Prospect]

 

The Frozen Politics of Social Security

James G. Chappel, February 13, 2023 [Boston Review]

Fixing Social Security: The Politics of Reform in a Polarized Age
Douglas Arnold
Princeton University Press, $29.95 (cloth)

The Retirement Challenge: What’s Wrong with America’s System and a Sensible Way to Fix It
Martin Neil Baily and Benjamin H. Harris
Oxford University Press, $29.95 (cloth)

…Social Security, believe it or not, has a utopian heart: the idea that all Americans deserve a life of dignity and public support once they become old or disabled. This vision does, for now, remain utopian: many Americans are right to worry that, without savings or private pensions, their older years will be just as precarious and austere as their younger ones. Social Security is nonetheless the lynchpin of the U.S. welfare system, such as it is. In 2022 some $1.2 trillion flowed from the system to nearly 66 million people. Most of those people are retired workers, but not all of them. Millions are the spouses or dependents of retired workers; millions more are disabled people, or the spouses or dependents of the disabled. All in all, about one in four Americans over the age of eighteen receives benefits from Social Security. If not for Social Security, almost 40 percent of older Americans would be living in poverty.

It is not going too far to say that the Social Security system, more than any other single institution, keeps the United States from becoming a truly Dickensian world of poverty and despair. Yet it has serious downsides, too. For one thing, benefits are low; even after much-needed cost-of-living increases, the average recipient will receive just over $21,000 per year. And for another, the Social Security trust fund will run dry in about twelve years, prompting an immediate benefit drop of about 20 percent (there is no realistic scenario in which benefits disappear altogether)….

Social Security’s details have often rankled leftists, too. They have complained, justly, that the Social Security Act did a great deal to enshrine and reproduce the inequalities of race, gender, and class that structure U.S. society. For instance, many Black workers were frozen out of the program in the early years because they worked in domestic service or agriculture—two fields that were not included in the program. Women earn less than men because they move in and out of the workforce to perform care labor, which is not captured in Social Security calculations. And, most obviously, the poor themselves make less from Social Security than their richer peers, even though they need it more.

 

The carnage of mainstream neoliberal economics

“Millions of people are about to get kicked off Medicaid”

[Vox, via Naked Capitalism Water Cooler 2-13-2023]

“Perhaps the greatest success of the American health care system these last few benighted years is this surprising fact: The uninsured rate has reached a historic low of about 8 percent. That’s thanks in part to the pandemic — or, more precisely, the slew of emergency provisions that the government enacted in response to the Covid crisis. One policy was likely the single largest factor. Over the past three years, under an emergency pandemic measure, states have stopped double-checking if people who are enrolled in Medicaid are still eligible for its coverage. If you were enrolled in Medicaid in March 2020, or if you became eligible at any point during the pandemic, you have remained eligible the entire time no matter what, even if your income later went up. But in April, that will end — states will be re-checking every Medicaid enrollee’s eligibility, an enormous administrative undertaking that will put health insurance coverage for millions of Americans at risk. The Biden administration estimates upward of 15 million people — one-sixth of the roughly 90 million Americans currently receiving Medicaid benefits — could lose coverage, a finding that independent analysts pretty much agree with. Those are coverage losses tantamount to a major economic downturn: By comparison, from 2007 to 2009, amid the worst economic downturn of most Americans’ lifetimes, an estimated 9 million Americans lost their insurance.”

 

American Dream For Rent: Investors elbow out individual home buyers 

[Atlanta Journal-Constitution, via The Big Picture 2-12-2023]

Long the bedrock of family wealth for the middle class, single-family homes have been snatched up in the thousands by private equity firms and publicly traded companies, converted into rental properties and bundled into complex investment vehicles.

These firms did not create Atlanta’s affordability crisis. A generational housing shortage, inflated construction costs and a surge in consumer demand have all contributed to the historic rise in prices. But a growing body of evidence leaves little doubt that the flood of cash from investors has exacerbated it.

“They go after every listing under $500,000 … it’s like clockwork,” said Maura Neill, a realtor in Alpharetta. “The property gets listed and, sight unseen, they make offers within an hour.”

Large investment firms are pushing homeownership out of reach for many first-time buyers, an Atlanta Journal-Constitution investigation has found.

Armed with billions of dollars in cash, bulk buyers have accumulated more than 65,000 single-family homes across the Atlanta metro area over the last decade, an AJC data analysis found. Eleven companies own more than 1,000 homes each. The two largest — Invitation Homes and Progress Residential — own more than 10,000 homes apiece.

 

“Ordinary Americans are counting the cost of thriving”

[Financial Times, via Naked Capitalism Water Cooler 2-14-2023]

“In 1985, an American man working the typical full-time job could support a family of four on 40 weeks of income, and be able to afford a range of nutritious foods, a three-bedroom house, a comprehensive health insurance plan, a family car, even saving to put both kids through the state university. In 2022, paying for all that would require 62 weeks of his income, which is a problem, there being only 52 weeks in a year. These figures come from the Cost-of-Thriving Index (Coti), which compares the rate at which wages are rising to the rate of cost increases for middle-class staples. They show starkly the effect on household budgets of a decades-long stretch in which housing prices [rents], health insurance premiums [rents], college tuition [rents], and more [rents] skyrocketed much faster than wages.”

[TW: The Cost-of-Thriving Index is the effort by the conservative think-tank, American Compass, established a couple years ago to help the (anti)Republican Party appeal to working class voters. In their words: “We are developing the conservative economic agenda to supplant blind faith in free markets with a focus on workers, their families and communities, and the national interest.” ]

 

“Report reveals deteriorating labor conditions at big US wireless carriers” 

[Guardian, via Naked Capitalism Water Cooler 2-16-2023]

“Labor conditions and collective bargaining rights have worsened in the large US wireless carrier industry now that big telecommunications firms are increasingly outsourcing their retail sales and customer service operations from company-owned stores….. In [the study, by the Communications Workers of America and National Employment Law Project], a survey of more than 200 workers at authorized retailers in 43 states found nine out of 10 workers reported experiencing wage theft. Three out of four workers reported having to rely on at least 25% of their wages through sales commissions. Nearly two in three workers reported they were unable to take breaks during their shifts. The reported wage theft includes being paid below minimum wage rates, denied overtime pay, denied commissions or bonuses or forced to work off the clock. Workers in the survey also reported experiencing retaliation for raising workplace problems, being forced to work overtime, a lack of adequate job training, being forced to sign non-compete agreements and claimed an emphasis on commissions had driven poor sales practices and customer service at their retail stores. About nine in 10 workers reported the wireless carrier that licensed their retail store still played a role in setting policies and practices at the retailers, despite authorized retailers’ classification as independent employers.”

 

[Twitter, via Naked Capitalism Water Cooler 2-13-2023]

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“Air Filters, Pollution, and Student Achievement” (abstract only)

[The Journal of Human Resources, via Naked Capitalism Water Cooler 2-14-2023]

“This paper identifies the impact of installing air filters in classrooms for the first time. To do so, I leverage a unique setting arising from the largest gas leak in U.S. history, whereby the offending gas company installed air filters in every classroom within five miles of the leak (but not beyond). Using a spatial regression discontinuity design, I find substantial improvements in student performance: air filters raised test scores by 0.1-0.2σ. Natural gas was not detected inside schools, implying that the filters improved air quality by removing common pollutants and so these results should extend to other settings.”

 

“The haunting brain science of long Covid”

[STAT, via Naked Capitalism Water Cooler 2-16-2023]

“There are no approved therapies for the physical or cognitive disabilities that now plague 65 million people around the world, a conservative estimate given the degree of undocumented cases. It is now clear from U.S. and U.K. investigations of approximately 2,000 previously hospitalized Covid patients that six months later more than half have problems managing finances and paying bills as well as completing everyday activities like preparing meals, bathing, getting dressed, or walking across a room…. Autopsy studies show that the virus can persist in some people for many months even though they have no symptoms and test negative for the virus. Brains donated by people who died of Covid-19 also show widespread problems in the cells lining the blood vessels and exaggerated clotting, supporting the idea of Covid-19 as a blood flow disorder that brings on brain disease…. A study from the National Institutes of Health of 44 complete autopsies mapped and quantified the distribution of SARS-CoV-2 and showed it was widely distributed throughout the body, including in the hypothalamus and cerebellum in the brain and neurons in the spinal cord. Especially relevant to long Covid, viral fragments were detected in some of the brains of people who died many months after symptom onset.”

Disrupting mainstream economics

[Twitter, via Naked Capitalism 2-15-2023]

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One Weird Trick That Neoclassical Economists Hate! 

Brian Romanchuk [Bond Economics, via Mike Norman Economics 2-13-2023]

Blair Fix caused a bit of a stir last week on economics Twitter with a cleaned up version of the above chart taken from his article on interest rates and inflation. My chart is a scatter plot of the U.S. annual CPI inflation rate versus the effective funds rate, from 1954-2022. The blue line is the best linear fit of the two variables. The “linear model” suggests that inflation is an increasing function of the nominal interest rate.

Blair was met with a predictable howl of indignation on Twitter. Why predictable? The belief that higher interest rates reduce inflation (with a technical twist I note below) is pretty much enshrined as an assumption in neoclassical economics. (I use “neoclassical” as a fancy-pants word to describe “mainstream academic economics,” as “mainstream” is somewhat ambiguous if we are not referring to academia.)

 

Contradictions within economic theory. All well known but still important and, I think, not taken as seriously as they should be.

Andrew Gelman [Statistical Modeling, Causal Inference, and Social Science, via Mike Norman Economics 2-17-2023]

 

Restoring balance to the economy

Eight States Have Joined Forces to Raise Taxes on America’s Wealthiest 

Stephanie Kelton [The Lens, via Mike Norman Economics 2-12-2023]

Unlike the federal government, individual states really do need to “find the money” to pay for their spending. And since more than 60 percent of the nation’s wealth resides in these states, it’s easy to see why lawmakers have focused on their high net worth residents.

 

It’s Time To Codify The ‘NY Times v. Sullivan’ Standard Into Law

[TechDirt, via Naked Capitalism 2-12-2023]

For all the misleading claims about “free speech under attack” in place where it is definitively not under attack (i.e., on social media sites, or via “cancel culture”), there are many areas in which free speech absolutely is under attack, and there may be no bigger one than the (relatively new!) movement to overturn the extremely important NY Times v. Sullivan case from 1964 that basically set the standards for defamation of a public figure. Basically, in an effort to make defamation law compatible with the 1st Amendment, the Supreme Court realized that it had to have a very high bar to bringing a successful defamation case. Otherwise, the Court (accurately) surmised, the rich and powerful would bring such cases against critics for just minor inaccuracies.

 

Collapse of independent news media

“It’s True What They Say About the NYT”

[RealClearPolitics, via Naked Capitalism Water Cooler 2-15-2023]

“This examination, undertaken by Jeff Gerth, a decorated investigative journalist formerly with the Times, was published by Columbia Journalism Review. It’s a tour de force! Having taken a year and a half to research and write, and at a length of 24,000 words in four installments, Gerth utterly destroys whatever is left of the lie that Trump was in league with the Russians, and of the extraordinary lengths the media went to spread that smear…. there is the shock of Columbia Journalism Review as the publisher. This small circulation magazine, published by the Columbia Journalism School, operates at the heart of the media establishment. More than this, both CJR and the journalism school have many ties with the Times. The current chairman of CJR, for instance, was until recently the deputy managing editor of the Times. That CJR’s editor/publisher, Kyle Pope, would agree to publish such a study elevates him to a kind of hero status that few editors or publishers have attained. … [G]iven that neither the Washington Post nor the Times have publicly addressed the gaping hole Gerth’s reporting has torn in their credibility – and the muted reaction of most of the rest of the corporate media to Gerth’s exposé, we seem to have entered a new era. In today’s brave new journalism world, objectivity and even truth have been abandoned in favor of a journalism that simply reflects whatever political or ideological narrative is prevalent at the time.”

 

[Twitter, via Naked Capitalism Water Cooler 2-16-2023]

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Climate and environmental crises

Climate Change Is Shifting Voter Behavior in Low-Income Countries

Amrit Amirapu, Irma Clots-Figueras, Juan Pablo Rud [Promarket, via Mike Norman Economics 2-15-2023]

Farmers in low-income countries have multiple channels through which they respond to climate change. Some switch to growing more heat-resilient crops or crops that require less water. Others migrate or leave agriculture altogether. In new research, Amrit Amirapu, Irma Clots-Figueras, and Juan Pablo Rud find that temperature shocks to agricultural production in India increase voter turnout in rural areas and push rural voters to elect candidates who are on average poorer, less tainted by corruption, and have a background in agriculture….

 

This Rare Asteroid May Be Worth 70,000 Times the Global Economy. Now NASA Is Sending a Spaceship to Explore It.

[Robb Report, via The Big Picture 2-13-2023]

If all goes to plan, the spacecraft will arrive at 16 Psyche in August 2029.

 

(anti)Republican Party

Republican Policies Are More And More Frequently Hurting Republican Voters

Howie Klein, February 17, 2023 [DownWithTyranny]

And now that wealthier and better educated voters have gravitated towards the Democratic Party in greater numbers, the old anti-working class GOP agenda is hurting their own base voters. Trump understands this even while most of them don’t— and he’s warned them that the party will go up in flames if they try to diminish Social Security or Medicare. Republican hostility to those programs were premised on the fact that wealthy people didn’t want to underwrite them and that those people were overwhelmingly Republicans while the beneficiaries were overwhelmingly Democrats. Things have changed, even if GOP lunkheads in Congress haven’t figured it out yet.

Yesterday, Tony Romm reported that “Top House Republicans are exploring significant changes to the nation’s food stamps program, including benefit cuts and stricter work requirements” and plan to threaten shoving the country off the fiscal cliff if the Democrats don’t agree to shove millions of families off their own fiscal cliff. “[T]heir policy decisions could carry great consequences for the roughly 41 million people who receive monthly food aid— and find themselves scrounging in the face of high bills.”

…The problem stems from Republican tax cuts for the wealthy. That’s it; it’s that simple. There is no other reason for the problem and the solution is just as simple— and something the GOP refuses to consider.

 

“Ron DeSantis Backs Down From A Fight”

Jonathan Chait [New York Magazine, via Naked Capitalism Water Cooler 2-14-2023]

“Biden is probably going to run — his performance was lively enough to at least slightly alleviate doubts about his age — and his campaign is likely to focus on a defense of Medicare, Medicaid, and Social Security…. This dynamic clicked into place for me when I saw two pieces of reporting about Ron DeSantis, the conservative Establishment’s selection to replace Donald Trump as the presidential nominee. First, Josh Barro noted that, as a member of the House in 2013 and 2014, DeSantis not only voted for Paul Ryan’s plan to turn Medicare into vouchers but also supported an even more radical plan that ‘would have raised the retirement ages for both Social Security and Medicare to 70…. The next day, Andrew Kaczynski and Em Steck reported for CNN that DeSantis had endorsed privatizing both Medicare and Social Security. ‘I would embrace proposals like [Rep.] Paul Ryan offered… What is perhaps even more telling is the response from DeSantis: nothing. DeSantis has built an identity as a fearless pugilist. One of his ads literally boasts that DeSantis will ‘never, ever back down from a fight.’ And yet, even after the media reported these damaging stories, and even after Biden traveled to Florida to give a speech attacking him for denying health coverage to a million Floridians by boycotting Medicaid expansion, DeSantis did not reply.”

 

“Scoop: The GOP guide for splashy hearings outside D.C.”

[Axios, via Naked Capitalism Water Cooler 2-16-2023]

“House Republicans are planning a series of attention-grabbing hearings outside of Washington, guided by a 15-page, private playbook obtained by Axios. With little chance of getting bills signed by President Biden, Republicans are sending subpoenas, planning trips to the southwest border and encouraging committees to find fresh, TV-friendly settings for hearings that target administration policies. The detailed memo lays bare Republicans’ aim for publicity by giving committees tips for attracting media coverage…. Field hearings ‘provide a unique opportunity to actually spend time in communities that are directly impacted by the issues we are talking about,’ [Rep. Bryan Steil (R-Wis.), an ally of House Speaker Kevin McCarthy (R-Calif.)], told Axios in a statement.

 

Covidiocy Marches On

[The Bulwark, via The Big Picture 2-12-2023]

Revisionism and recriminations abound as skepticism of “establishment” science becomes a tribal identity marker on the right.

 

Revealed: the hacking and disinformation team meddling in elections 

[Guardian, via Naked Capitalism 2-16-2023]

A team of Israeli contractors who claim to have manipulated more than 30 elections around the world using hacking, sabotage and automated disinformation on social media has been exposed in a new investigation.

The unit is run by Tal Hanan, a 50-year-old former Israeli special forces operative who now works privately using the pseudonym “Jorge”, and appears to have been working under the radar in elections in various countries for more than two decades.

He is being unmasked by an international consortium of journalists. Hanan and his unit, which uses the codename “Team Jorge”, have been exposed by undercover footage and documents leaked to the Guardian….

The undercover footage was filmed by three reporters, who approached Team Jorge posing as prospective clients.

In more than six hours of secretly recorded meetings, Hanan and his team spoke of how they could gather intelligence on rivals, including by using hacking techniques to access Gmail and Telegram accounts. They boasted of planting material in legitimate news outlets, which are then amplified by the Aims bot-management software.

Much of their strategy appeared to revolve around disrupting or sabotaging rival campaigns: the team even claimed to have sent a sex toy delivered via Amazon to the home of a politician, with the aim of giving his wife the false impression he was having an affair.